This article originally appeared in the September 2010 issue of Smart Business Philadelphia magazine.
If you have not yet considered a cost-effective system that could streamline your company’s data, communications and processes, and create oversight for management, you may want to do so.
"Enterprise resource management has become more of a science in the last 10 to 15 years," says Sassan S. Hejazi, director, and practice leader of the Technology Solutions Group at Kreischer Miller. "While not new, enterprise resource management systems have become user friendly and practical for small and large companies. If management does a good job with planning, as with any project using proven project management techniques, the success of implementing an enterprise resource management system is very high.
"Organizations reap the rewards of becoming more agile and efficient, and management is able to make decisions in a shorter period of time."
Smart Business spoke with Hejazi about how to implement an enterprise resource management system to create efficiency and cost savings.
What is enterprise resource management?
Enterprise resource management is a set of software solutions that integrates various processes and information across an organization. Organizations that have a silo mentality, with each department, division or function maintaining its own data, are able to share information efficiently. For example, when information about a sale is entered by sales and marketing personnel, it goes seamlessly to the production department and also to accounting and finance.
The organization becomes streamlined, processes become more efficient, and personnel does not need to record information more than once for it to disseminate across all departments of the organization.
What are the key advantages of enterprise resource management?
Having information integrated across an organization provides owners and executives the ability to make informed decisions about the company and also departments within the company.
From an overall management standpoint, a major advantage is the succinct presentation of information. Managers have access to specific information about their department, other departments and also the entire organization. This shared knowledge enables company leaders to analyze which departments are contributing to the value of the company and where to invest resources.
From an accounting and finance standpoint, the major advantages provided by enterprise resource management are timely and accurate information, and increased productivity of management and personnel. In today’s still fragile economy, to remain competitive and profitable, companies need to maximize production of each employee and not have them spending time performing non-value-added activities, such as entering the same information in different systems to get the reports.
With an enterprise resource management system, personnel enter information once and it disseminates across the company, eliminating repetition of the same task or process at the department level.
What tools are needed to implement enterprise resource management?
External tools and internal tools are necessary to successfully implement an enterprise resource management system. There are a multitude of software services available. Some of the more well known are SAP, Oracle, Epicore, Sage and Microsoft that generally run on industry-standard computing equipment.
The biggest resource that an enterprise resource management system needs is knowledgeable and dedicated management. It requires internal leadership to shepherd the implementation project, and it requires assistance from outside professionals to help with change management. The purchase and installation of the software is a minor component of the project. The major components are effective training and change management.
An enterprise resource management system impacts the entire organization; it changes the way employees perform their work. Information is stored differently, requiring employees to learn new processes in order to take advantage of the features that the solution offers.
How should an organization begin implementation?
Owners and executives would be wise to perform thorough due diligence before selecting an enterprise resource management system. They should begin by identifying the company’s current and future objectives and goals, and anticipated industry and economic changes that could impact the company. Next, they should apply these requirements to the latest software solutions available, relative to the company platform or capabilities, the company size and budget, and company industry.
Once a software solution has been decided, the owners and executives need to develop a project and change management plan to implement the solution. Generally, the implementation of an enterprise resource management system is a two- to three-year journey for middle-market companies.
Start with low expectations, define the must-haves for the first phase and then build on the success of that phase to expand the capabilities of the solution into various departments of the company
The approach that has proved very successful locally and around the world is a crawl, walk, run approach. ●
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